Aviva has made further changes to its critical illness plans. The two main changes are:
• Loss of speech has been removed as a separate condition. Aviva reported that it had not paid one loss of speech claim in 15 years.
• Extra Care cover has been cut to three rather than four options. Aviva’s logic is that many illnesses it covers are more likely to occur at older ages and that symptoms will typically worsen over time. So, the maximum age for specified conditions has been increased from 50 to 55. Aviva adds that by simplifying the Extra Care Cover definition, it should be easier for advisers to communicate the benefits to their clients. In addition, a further four conditions can now be claimed on up to the age of 55 – these typically lead to a deterioration in health over a longer period, often resulting in significant care needs to support changes in lifestyle. The four are kidney, liver, heart and respiratory failure.
Comment: Any time an insurer drops a CI condition, eyebrows will be raised. Superficially, that must mean less or narrower cover for the customer. However, if that condition has never paid out then, arguably, it shouldn’t be a covered condition anyway – it looks like it’s there just to make the numbers look good.
And analysts CI Expert say they were not aware of a single claim being paid by any insurer, adding that loss of speech is usually due to cancer or stroke – both of which are covered anyway.
So Aviva is to be applauded for dropping loss of speech as a condition, and we expect others to follow.
Similarly, simplifying CI is a good idea and though it means less choice, sometimes less is more, especially if it leads to a higher take-up without sacrificing essential cover.
Taking all into account, these are small but useful changes.
Plus points: Simplifying CI is fundamentally a good idea; Dropping a condition that never pays any claims anyway makes sense.
Not so plus points: Some may see a condition being dropped or fewer Extra Cover options as negative; CI remains a complex product to understand.
Rating (max 10): Overall: 8. Gold
Tags: CI; Aviva
I Mark: No